The security cabinet approved Wednesday evening Prime Minister Benjamin Netanyahu's proposal to halt construction in the West Bank settlements for a period of 10 months.
Eleven ministers voted in favor of the plan, while Infrastructure Minister Uzi Landau opposed the initiative, which was coordinated with the US in an effort to jumpstart the Israeli-Palestinian peace negotiations.
Interior Minister Eli Yishai (Shas) and Housing and Construction Minister Ariel Atias were absent from the vote.
Shortly after the vote Netanyahu told a televised press conference at his Jerusalem office that the step was designed to "encourage resumption of peace talks with our Palestinian neighbors."
"It's not an easy step and we are taking it out of broad national considerations," he said, adding, "I hope that the Palestinians and the Arab world will be wise enough to take this opportunity to move forward in the path of peace," he said.
Netanyahu stressed that the settlement freeze would not be implemented in east Jerusalem.
"We do not put any restrictions on building in our sovereign capital," the prime minister said.
"Now is the time to begin negotiations, now is the time to move forward towards peace. Israel today has taken a far-reaching step toward peace; it is time for the Palestinians to do the same," he added.
"Israel's government has made an important step toward peace today, let us make peace together."
Netanyahu further told reporters, "As soon as the suspension period concludes, my government will resume the West Bank construction policy of previous governments."
"I have promised to allow our 300,000 brothers residing in the West Bank to continue to lead normal lives, and therefore construction that is already underway will not ne halted. We will continue to build synagogues, schools and kindergartens," he said.
Construction in Ma'aleh Adumim Wednesday (Photo: AFP)
Among those who backed the initiative were hardliners Foreign Minister Avigdor Lieberman and Ministers Moshe Yaalon and Benny Begin.
Industry, Trade and Labor Minister Binyamin Ben-Eliezer (Labor) said after the vote, "It’s an important and historic decision, one of the most important decisions this government has made. The decision will leave the Palestinians with only one choice – join the political negotiations. They have no reason to stall anymore."
Earlier, a US official said the United States hopes Netanyahu's proposal can help revive Middle East talks,
"We're hoping this will in some way contribute to the resumption of negotiations" between the Israelis and Palestinians, the official told AFP on condition of anonymity.
Israel has been under heavy international pressure to halt its construction in settlements built on captured lands claimed by the Palestinians. Some 300,000 Israelis live in the West Bank, in addition to about 180,000 people living in Jewish neighborhoods in east Jerusalem.
Netanyahu earlier floated the idea of suspending construction in existing settlements. Wednesday's offer was the first time he has given a firm timeline for how long he is willing to stop the building.
Palestinians already rejected the move before the announcement because the freeze does not include construction in Jewish neighborhoods in east Jerusalem, which the Palestinians want as the capital of their future state. Israel captured east Jerusalem from Jordan in the 1967 Arab-Israeli war and annexed it soon after.
Palestinian President Mahmoud Abbas has demanded a total halt to settlement construction before peace talks can resume. On Wednesday, chief Palestinian negotiator Saeb Erekat said there was nothing new in Netanyahu's announcement, pointing to the 3,000 new housing units under construction in the West Bank.
"This is not a moratorium. Unfortunately, we hoped he would commit to a real settlement freeze so we can resume negotiations and he had a choice between settlements and peace and he chose settlements."
Palestinian presidential adviser Nabil Abu Rdeneh said the proposed freeze would be unacceptable if it didn't include east Jerusalem.
"Any Israeli offer that doesn't include Jerusalem will be rejected immediately," he said in a phone interview from Argentina, where he was traveling with President Abbas. "No Palestinian, no Arab can cross this line."
Abbas himself did not address the Israeli announcement directly, but he and Chilean Counterpart Michelle Bachelet issued a joint statement calling for called for "the urgent need for Israel to end illegal settlements in the Palestinian territories, which hinder the sustainability and geographical contiguity of the future Palestinian state."
The statement, which followed Abbas and Bachelet's meeting in Santiago on Wednesday, also called for a "just and viable peace based on a two-state solution."
Netanyahu, a traditional ally of the settler movement, has argued that some construction should be permitted to allow for "natural growth" in their communities. His latest offer applies only to "new construction permits", meaning that some 3,000 homes already approved for construction would not be affected.
Ali Waked, AFP, AP and Reuters contributed to the report